Report: Mobile Data and Emerging Economies are Key to Growth in Telecom Market

3G networks and mobile data services will prop up the worldwide telecommunications market, prompting it to grow at a 6 percent CAGR to reach $2.4 trillion in revenues in 2013, according to Analysys Mason.

 

The analyst firm has predicted that mobile data traffic will grow at a 131 percent CAGR through 2013.

 

Mason has cited two main reasons for the growth in the market: Communication service providers are launching 3G networks in many emerging markets, such as China and India, and LTE (News - Alert) technology will become available in most mature markets during the next few years.

 

While mobile data presents the greatest revenue opportunity for operators, it could also be their biggest challenge, says the analyst.

 

“They must find ways to monetize that traffic so that all of the value doesn't go to device manufacturers, such as Apple and Nokia, and content owners.  Flat-rate, 'all-you-can-eat' plans break the link between traffic and revenues," said Roz Roseboro, senior analyst at Analysys Mason.

 

Interestingly, the researcher said, U.S. telecom giant AT&T (News - Alert), NTT DoCoMo, China Mobile and KDDI generate most of their revenues in their home markets, while Western European operators like Deutsche Telekom, Telefonica, France Telecom, Vodafone and Telecom Italia (News - Alert) are managing to earn more money in overseas markets.

 

Though the market is hit by the storm of economic downturn, Analysys Mason said it found CSPs managing their costs successfully.

 

The global telecoms services market grew by 5 percent in 2008 to reach $1.8 trillion in revenues, despite the economic downturn. Even more encouraging was the on-year growth in EBITDA, which stood at a very impressive 10 percent, the firm said.

 

The research firm noted that mobile services continue to be the leading source of revenues. Mobile voice services accounted for 36 percent of global service revenues in 2008, and mobile data services accounted for 10 percent, while traditional voice services represented only 21 percent.

 

There are more than twice as many mobile subscribers in the world as there are traditional voice lines – four billion versus two billion.

 

 In emerging markets, the analyst said, mobile services tend to account for an even larger share of service revenues – up to 58 percent, in some cases. The mature markets of North America, Western Europe and developed Asia Pacific accounted for 70 percent of global telecom revenues in 2008, but the emerging markets registered greater growth rates.

 

Sub-Saharan Africa, the Middle East and North Africa, Central and Latin America, the Asia Pacific and Central and Eastern Europe all achieved double -digit revenue growth in 2008.

 

The top-ten CSPs accounted for 44 percent of global revenues in 2008. All of the top-ten operators, except China Mobile (News - Alert), are based in mature markets, but their sources of revenues vary, Mason said.